Sponsoring Rep. Kills TCPA Reform Bill

U.S. Congressman Lee Terry said late Wednesday a bill he sponsored that would have allowed certain businesses to use autodialers to contact cell phones has been killed at his request.

Rep. Terry (R-Neb.), along with the bill’s co-sponsor, Rep. Edolphus Towns (D-N.Y.), sent a letter Wednesday to the chairman of the House Energy and Commerce Committee asking that H.R. 3035 not be advanced. The bill, also called The Mobile Informational Call Act, had been heard by the Committee and was awaiting further action.

So as to leave no ambiguity of the bill’s ultimate fate, Rep. Terry told the Omaha World-Herald, “We’re driving a stake through its heart. Dead. Done. Buried.”

Terry and other lawmakers faced extraordinary backlash on the bill, with a constant stream of communication from constituents and consumer groups opposing the bill.

The bill would have updated the Telephone Consumer Protection Act (TCPA) to allow businesses to use assistive telecommunications technology, such as predictive dialers, to contact consumers on their wireless numbers for calls that do not constitute a solicitation, including payment reminders and third party debt collection calls.

Currently, assistive dialing technology can be used to contact cell phone numbers only if a consumer gives permission under a very narrow reading of “prior express consent.” For example, if someone buys an airline ticket and specifically gives a cell number to be used for travel updates, an airline can use autodialed and pre-recorded messages sent to mobile phones to communicate changes in service or update a traveler on delays.

But H.R. 3035 sought to expand the definition of prior express consent to include cell numbers given by customers at the purchase of a good or service or when a number is obtained at any point in the relationship.

The bill still would have expressly forbidden the use of autodialed calls, or “robo calls,” to cell phones for telemarketing purposes.

TCPA reform had broad interest in the business community, with a coalition of organizations offering formal support that included the American Bankers Association, the U.S. Chamber of Commerce, the Mortgage Bankers Association, the Air Transport Association, the National Council of Higher Education Loan Programs, and debt collection trade group ACA International.

“ACA International and members of the Coalition of business organizations with whom we’ve been working are deeply disappointed by this action.  We are regrouping to determine next steps,” said Patrick Morris, CEO of ACA International.

The bill was opposed by most consumer groups, with the most common argument being that end-users would be charged for robocalls, since many cell phone plans bill by the minute. And last week, almost all of the U.S. states’ and territorial attorneys general sent a letter to Congress urging lawmakers to vote against the measure.

“Not passing this reform will dramatically impact efforts to recover past due accounts receivable for financial institutions, lenders and creditors of all types as well as all levels of  government aggressively seeking to balance their budgets,” noted Mike Ginsberg, CEO of ARM advisory firm Kaulkin Ginsberg.

The federal government has recognized the need to be able to contact consumers via cell phone for the purpose of debt collection. Two days before H.R. 3035 was introduced, President Obama proposed allowing government debt collectors to call cell phones to recover government owned or government backed debt. The proposal was a part of the President’s deficit reduction plan.

“Unless and until large companies, industry figureheads, publications, and associations actively get behind this reform, it does not have a chance of passing through the walls being put up by most consumer groups,” said Ginsberg.